Understanding Advance Tax in India (Section 208 & 211)
Installment due dates, computation methodology, interest penalties under Section 234B/C, and senior citizen exemptions.
What is Advance Tax and Who Must Pay It?
Advance tax is the payment of income tax in installments throughout the financial year as you earn income, rather than paying a lump sum at the time of filing your ITR. Under Section 208 of the Income Tax Act, 1961, any taxpayer whose estimated total tax liability for the financial year (after deducting TDS and TCS) is ₹10,000 or more is legally required to pay advance tax.
Advance Tax Installment Schedule for FY 2024-25 (Individual & Corporate)
| Quarter | Statutory Due Date | Cumulative Tax Payable | Quarterly Share |
|---|---|---|---|
| 1st Installment (Q1) | On or before June 15 | 15% of net tax | 15% |
| 2nd Installment (Q2) | On or before September 15 | 45% of net tax | 30% (less paid in Q1) |
| 3rd Installment (Q3) | On or before December 15 | 75% of net tax | 30% (less paid earlier) |
| 4th Installment (Q4) | On or before March 15 | 100% of net tax | 25% (balance tax) |
Penalties for Deferment: Sections 234B & 234C
If you fail to pay advance tax or pay less than 90% of your assessed liability by March 31, simple interest at 1% per month is charged under Section 234B. Additionally, deferment of quarterly installments attracts 1% monthly interest under Section 234C.
Senior Citizen Exemption under Section 207
Resident senior citizens aged 60 years or older who do not have any business or professional income are completely exempt from paying advance tax. They can pay their full taxes at the time of filing their ITR before July 31 without any penalty interest under Section 234B.